Rhode Island’s rating on $1 billion of general-obligation debt was reduced one step to AA- from AA by Fitch Ratings, which said the state’s economy is among the weakest in the U.S., with monthly job losses since August 2007.

The rating company also downgraded an additional $500 million in state-backed appropriation debt to A+ from AA-, according to Laura Porter, a Fitch analyst in New York.

The rating company said a projected $67 million in Medicaid savings are unlikely to be realized because the state needs a waiver from the federal government “that does not appear to be forthcoming in the near term.”

Gen. Treas. Frank Caprio’s deputy chief of staff, Xaykham Khamsyvoravong, confirmed the debt downgrade and surmised that it was prompted by a “top-to-bottom review” by Fitch of all of its state and municipal ratings and not any specific event. “It’s basically weak revenues,” added Caprio’s chief of staff, Mark Dingley. “Fitch already had the state on watch,” but the downgrade is so “slight… I don’t think this should have much of an impact on borrowing.”

-- by Journal State House Bureau